April 2022: Effects of the war reach European foundries
The European Foundry Industry Sentiment Indicator (FISI) decreases by 2.7 points in April and reaches a value of 105.5 points. This marks the highest monthly loss since the outbreak of corona pandemic in Europe in March 2020.
After the decline in the previous month was mainly caused by a war-related drop in business expectations for the upcoming six months, European foundries are now increasingly reporting an impact on the current business situation.
While the sanctions against Russia were steadily tightened in March and April, the problems in the supply chains and the adjustments in the prices for input materials are becoming more and more apparent. In addition to the war, global disruptions in the logistics industry have also increased due to the harsh Corona lockdown in China.
On the demand side, April has continued to be characterised by uncertainties in European vehicle manufacturing. In particular, the supply of cable harnesses from Ukraine caused some vehicle OEMs to stop production and led to postponed and cancelled call-offs at supplying foundries. Meanwhile, the mechanical engineering sector continues to be characterised by a historically good order situation. Serving these orders is nevertheless a challenge for many foundries given the difficulties in production planning.
Meanwhile the Business Climate Indicator (BCI) increased in April. The noticeable increase of 0.30 points brings the index to 1.98 points. This marks the highest ever recorded level since the beginning of the calculation in 1985. The driving force behind this upswing is the rapid increase in sales price expectations.
The FISI – European Foundry Industry Sentiment Indicator – is the earliest available composite indicator providing information on the European foundry industry performance. It is published by the European Foundry Association (CAEF) every month and is based on survey responses of the European foundry industry. The CAEF members are asked to give their assessment of the current business situation in the foundry sector and their expectations for the next six months.
The BCI – Business Climate Indicator – is an indicator published by the European Commission. The BCI evaluates development conditions of the manufacturing sector in the euro area every month and uses five balances of opinion from industry survey: production trends, order books, export order books, stocks and production expectations.
Tillman van de Sand
Secretary Commission for Economics & Statistics
phone: +49 211 68 71 — 301